Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $2.8M (vs $4.1M modeled).
EBITDA Bridge — 7 RCM Levers
Each bar shows the annual EBITDA impact at full run-rate. Revenue levers increase top-line; cost levers reduce operating expense; cash acceleration releases working capital. Calibrated to published research bands (Denial 12%→5% = $8-15M on $400M NPR).
Lever Detail
Each value shows its data source. SELLER = seller data room, DEFAULT = model default, BENCHMARK = P75 peer benchmark.
| Lever | Current | Target | Revenue | Cost | EBITDA | WC | Ramp |
|---|---|---|---|---|---|---|---|
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $1.5M | $1.5M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.5M | $43K | $1.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $237K | $703K | $940K | $3.0M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $49K | $49K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 61.5% BENCHMARK | $0 | $0 | $0 | $0 | 18mo |
| CDI / Case Mix Index | 135.0% DEFAULT | 142.0% BENCHMARK | $0 | $0 | $0 | $0 | 18mo |
Implementation Timing Curve
Linear ramp to full run-rate per lever. Month 0 = close date. Partners should expect 60-70% of total uplift realized by month 12.
| Lever | M0 | M3 | M6 | M9 | M12 | M18 | M24 | M36 |
|---|---|---|---|---|---|---|---|---|
| Cost to Collect | $0 | $386K | $773K | $1.2M | $1.5M | $1.5M | $1.5M | $1.5M |
| Denial Rate Reduction | $0 | $383K | $765K | $1.1M | $1.5M | $1.5M | $1.5M | $1.5M |
| A/R Days Reduction | $0 | $313K | $627K | $940K | $940K | $940K | $940K | $940K |
| Clean Claim Rate | $0 | $25K | $49K | $49K | $49K | $49K | $49K | $49K |
| Cumulative | $0 | $1.1M | $2.2M | $3.3M | $4.1M | $4.1M | $4.1M | $4.1M |
Returns Sensitivity (IRR / MOIC)
5-year hold, 5.5x leverage, 3% organic growth, 10%/yr debt paydown. Green = exceeds 20% IRR hurdle. Amber = 15-20%. Red = below hurdle or loss. RCM uplift of $4.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 177% / 162.1x | 183% / 180.5x | 188% / 198.8x | 191% / 208.0x | 193% / 217.2x |
| 9.0x | 170% / 143.7x | 176% / 160.0x | 181% / 176.4x | 184% / 184.5x | 186% / 192.7x |
| 10.0x | 164% / 129.0x | 170% / 143.7x | 175% / 158.4x | 178% / 165.8x | 180% / 173.1x |
| 11.0x | 159% / 117.0x | 165% / 130.4x | 170% / 143.7x | 173% / 150.4x | 175% / 157.1x |
| 12.0x | 155% / 107.0x | 160% / 119.2x | 165% / 131.5x | 168% / 137.6x | 170% / 143.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 94% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.4x, adding 8.1 turns of cushion.
5-Year Value Creation Waterfall
EBITDA trajectory: 3% organic growth + RCM uplift ramp (full run-rate at month 18).
| Base EBITDA | RCM Uplift | Total | Margin | |
|---|---|---|---|---|
| Entry | $190K | — | $190K | 0.2% |
| Year 1 | $195K | +$2.7M | $2.9M | 3.8% |
| Year 2 | $201K | +$4.1M | $4.3M | 5.5% |
| Year 3 | $207K | +$4.1M | $4.3M | 5.5% |
| Year 4 | $213K | +$4.1M | $4.3M | 5.5% |
| Year 5 | $220K | +$4.1M | $4.3M | 5.5% |
Achievement Sensitivity
What if we only achieve a fraction of each lever? 50% = conservative, 75% = base management case, 100% = plan, 120% = stretch.
| Lever | 50% | 75% | 100% | 120% |
|---|---|---|---|---|
| Cost to Collect | $773K | $1.2M | $1.5M | $1.9M |
| Denial Rate Reductio | $765K | $1.1M | $1.5M | $1.8M |
| A/R Days Reduction | $470K | $705K | $940K | $1.1M |
| Clean Claim Rate | $25K | $37K | $49K | $59K |
| Total | $2.0M | $3.0M | $4.1M | $4.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 94 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.2% | -14.5% | -8.3% | -3.1% | P85 |
| Net-to-Gross | 41.2% | 47.2% | 53.5% | 61.5% | P14 |
| Occupancy | 41.8% | 14.6% | 20.6% | 32.9% | P90 |
| Rev/Bed | $3.1M | $906K | $1.3M | $1.8M | P94 |
| Exp/Bed | $3.1M | $971K | $1.4M | $2.1M | P91 |
Bridge Methodology
Coefficients calibrated to published research bands: denial 12%→5% = $8-15M on $400M NPR. Current metrics estimated from HCRIS public data and ML predictions. Target metrics set at P75 peer benchmarks with 60% gap closure assumption. Revenue levers use NPR × delta × avoidable share. Cost levers use claims volume × cost per reworked claim. Working capital from AR reduction is one-time cash (not included in recurring EBITDA). Returns assume 5.5x leverage, 3% organic growth, 10%/yr debt paydown.